Cost of capital

Analysis of the ever-changing price of money

Stock prices rose last fortnight. The S&P 500 index of big American companies climbed 0.4% to 5,291. The S&P 500 offers an 8.7% annual expected return at the current price.

According to 𝑉𝑎𝑙𝑢𝑎𝑏𝑙's discounted cash flow model, the S&P 500 is worth about $4,737 per share. This model, which relies on analysts' consensus estimates for each company in th…